I’ve worked as a contractor, consultant, and direct employee. Each of these relationships is different; none of them is perfect. Are you ready to ditch your FTE and become a consultant? Here’s a few things to think about….

Can You Run a Business?

I’ve met hundreds of talented individuals who are terrible business people. Consider the great doctor who can’t manage or afford his/her private practice. The finish carpenter who can’t accurately bid out a project or generate an invoice. The full-stack software architect with no ability to write a statement of work or manage a project.

This is where I hear, “Ohh, puh-leeze, I’ll hire someone for that!” to which I respond, “Oh, puh-leeze, no one is interested in working for you!” (Small shops are not competitive employers – don’t think you can hire “some kid” to manage your website). Moreover, hiring help entails huge legal and financial responsibilities, and BTW, where are you going to come up with a weekly salary and benefits and pay taxes when you have one client and can barely support yourself?

Consider the following activities:

• Marketing/Sales: Finding, qualifying, and pipelining new clients; promoting the business. You.
• Legal: Licenses, in$urance, banking, taxes. You.
• $oftware: Updates, equipment, desktop troubleshooting, web page(s), WiFi, Cloud storage. You.
• Finance: Contracts, proposals, invoices, time cards. You.
• Overhead: Office rent, supplies, printer cartridges, computers. You.
• Benefits: Vacations, holidays, sick days, medical insurance, family leave. You.

And that’s before you do any real “billable” client work – which is often >40 hours per week, more if you are juggling multiple projects.

If you read that list and thought, “Ugh!” stay an employee.

Can You Run a Project?

Do you track your time? Do you track your money? Are you disciplined and organized in your personal life? Can you put together a schedule? Can you write a contract? What about a statement of work? Can you track, measure, and demonstrate progress? Can you make a deadline? Can you manage change and say no to difficult people?

When I meet with clients who are dealing with failed projects, high turn-over, and assorted other maladies, my first question is this: How does the team track their time? (They don’t.) Do YOU track your time? (Answer: I’m an “executive.”) Then, I get a big lecture about how hard everyone works, and they don’t have time to track their time.

Here’s my point:

I wasn’t questioning their work ethic, I was questioning their activities.

The inability to assess the value of activities as it relates to time expended is why people fail at consulting – and fail at a whole bunch of other stuff as well.

When you’re a consultant – time is EVERYTHING. Billable time, bizdev time, vacation time, career development time, commute time. And, there’s other things that take your time: Laundry. Food prep. Cleaning. Video Games. Your relationship(s). Did I mention the kids? You’ll need to manage ALL your time like the precious, finite, resource it is. That means you need to say, “I’m sorry, but that’s not a good use of my time,” even to your spouse.

Are You a Push-Over?

If you suffer from people pleasing, or have a hard time saying no, I beg you: For the sake of your personal health, personal finances, and happiness do NOT become a consultant!

Consulting is not all Power Point presentations and conference rooms with killer views. Consultants are small business owners, project managers, and buzz-kill realists. To be one requires a certain amount of cold, capitalist, callousness. How will you handle scope creep? Can you give bad news? Can you graciously deal with getting fired? (coz you will be). What about your ethics? Can you graciously dump a client (coz you’ll need to).

You want to run with the big dogs? You’re going to get pissed on. Consultants don’t have a boss, or HR, or a union, or labor laws – you have client and a contract. What are you going to do if they don’t honor it?

Are You Just Assuming You’ll Get Paid?

Very early on in my career, I worked for a couple of unscrupulous salesmen who refused to reimburse me for almost $2K in travel expenses I had foolishly put on my personal American Express card. This was back in the ’90’s, so that was a LOT of money then, and even more for an irresponsible 20-something who didn’t even have a savings account.

Although I eventually got my money, this whole thing was a huge financial fiasco, and it took me a l-o-n-g time to recover from it. These guys had let me go on Christmas Eve (for real), no severance, no final paycheck. I had to borrow money from family to pay AmEx and rent and bills. I had to go to court to get commissions, expenses, and back wages due me; and I had to freeze their bank account to collect. All of this taught me very important lesson:

No one is more unpleasant than someone who owes you money.

When you are a consultant, you’re a vendor. You don’t have the same legal protections that you would as a W2 employee. Consider the Crystal Geyser guy. If the customer decides to go with Sparkletts, Crystal Geyser doesn’t file for unemployment. If the delivery truck gets stolen, Crystal Geyser still has to service their accounts. They don’t call and ask their customers to buy them a new truck and front them for water.

An employee must be paid no less than twice a month. But you’re not an employee, so your clients will want you to bill every 30 days, and then pay you in 30 days – just like they do all their other vendors. But, what if they don’t pay you? What if they’re late? What if they disagree with the invoice? How long are you prepared to work without being paid? A week? Two weeks? A month? Three months? What if they claim your work is defective and refuse to pay? What about travel? Are you putting that on your personal credit card? What if they don’t reimburse you or take months to do so? What are you going to do about it?

I’ve worked for big, corporations my entire life.

You’d be amazed how many rich companies don’t pay their bills on time.

When you truly work for yourself, you can’t put up with excuses. Other people’s bills, emergencies, sick kids, corporate “process” and vacation time is NOT your problem. If you can’t write clear acceptance criteria for your work, can’t say no, or could never see yourself suing someone, don’t waste time trying to be consultant. I’ve listened to lots of people (mostly women, I’m sorry to say), who thought they could handle this kind of relationship, and ended up being taken advantage of by someone who was really, really, going to pay them when <crisis> passed.

When you consult, you need to track your time and tasks, keep copies of all your work, be prepared to withhold work until you’re paid for it, be prepared to walk out if you’re not paid, and be prepared to sue.

If you have a tough time sticking up for yourself, can’t handle people’s anger, or just can’t be “mean,” being a consultant is absolutely NOT for you!

Final Thoughts

Do you want to consult, or do you want more control over your scope and the direction of your career? Do you want to consult, or do you want more free time?

If you’re a full-time employee, and if you’re wondering if consulting could be for you, I strongly encourage you take a few contract, “temp” jobs. This will give you a feeling for what it’s like to have a client instead of a boss, and also give you some practice at managing the scope of your work and duration of your project.

My book, The Temp Job: A Survival Guide for the Contingent Worker offers straight-forward, no-nonsense advice to anyone navigating today’s contingent labor market. If you’ve never worked as a contractor or consultant, it’s essential reading.

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